Today’s News Synopsis:

Aaron presents highlights from the news of the week in this week’s video. Housing starts decreased by 9.8% last month to 999,000. Three representatives are aiming to put together a new bill that will create a new housing finance system and bring changes to the GSEs.

In The News:

“Following an unusual surge in housing starts in November, nationwide housing production fell 9.8 percent to a seasonally adjusted annual rate of 999,000 units in December, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.”

“Representatives John K. Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., are putting together a housing finance reform proposal that uses private sector market forces to price risk while providing the security of a government guarantee behind the program.”

Looking Back:

According to the latest report from the National Association of Home Builders, housing starts increased 12.1% the previous month. 1.4 million homeowners were rescued from negative equity with the increase in home prices. Mortgage rates increased ever so slightly from record lows to 3.38%.

Today’s News Synopsis:

Fitch Ratings reports delinquencies on commercial real estate CDOs increased to 12.1% last month. Statistics from BarCap show GDP slowed to an annual rate of 1.6% in the 2nd quarter. I Survived Real Estate 2010 is taking place tonight. Multiple experts from different regions of the real estate industry will be speaking at the event. You can watch it live at www.isurvived2010.com

In The News:

“President Obama appointed Elizabeth Warren advisor to Secretary of the Treasury, and she will be in charge of setting up the Consumer Financial Protection Bureau. Warren was the chair of the Congressional Oversight Panel, which oversees the Treasury’s implementation of the Troubled Asset Relief Program”

“Delinquencies on commercial real estate loan collateralized debt obligations rose slightly in August, up to 12.1%, according to Fitch Ratings. The agency’s CREL CDO index in July was 12% and 7.5% a year earlier. The record reached a record high of 13% in January.”

“In the second quarter of 2010, GDP slowed to an annual rate of 1.6%, slightly better than what analysts projected. According to BarCap, a narrowed trade deficit in July, stronger-than-expected business inventories, and moderating growth in manufacturing activity suggest more GDP growth in the third quarter.”

“G&E Corp., Cisco Systems Inc. and General Electric Co. are all betting that energy-monitoring devices will catch on in homes. Convincing consumers that they’re a good thing is turning out to be a tough sell. Power companies have traditionally relied on workers walking house to house to monitor electricity use. Smart meters are designed to give utilities a real-time picture of electricity consumption, eventually allowing them to create pricing plans that will encourage conservation during peak hours. About 43 percent of U.S. homes will have the new meters by 2014, up from 14 percent at the end of last year, according to Dallas-based market researcher Parks Associates.”

“Chip Besse figured he could hire a dozen people once he got a $1.1 million small-business loan. Wells Fargo & Co. turned him down. U.S. taxpayers helped the San Francisco-based bank weather the 2008 financial crisis with a $25 billion loan and $9.5 billion of debt guarantees. By July 2009, when Besse wanted to buy and expand a Colorado snowmobile-rental business, Wells Fargo wasn’t sharing the wealth, he said.”

“The UC Irvine Center for Real Estate reports that it’s having an easier time finding jobs for its students, a possible sign of improvement in the real estate jobs market. Both large banks, like Wells Fargo and Bank of America, and emerging businesses are hiring, center officials said. There’s also increased interest on the part of full-time employers, summer employers, people interested in interns and people interested in mentorships.”

“An Irvine homeowner is suing a large national mortgage servicing company, saying they perpetrated a ‘loan modification hoax’ and committed fraud by promising but never granting her a permanent home loan modification.”

Today’s News Synopsis:

President of John Burns Real Estate Consulting expects the commercial real estate market to do further damage to residential real estate. New legislation requires swap dealers and major swap participants to register with regulators and requires clearing organizations to provide transaction information to appropriate regulators. GE, MGIC, and Bank of America lost over 500 million in Q3 of 2009.

In The News:

“Bank of America (BAC: 17.26 -4.64%) lost $1bn or $0.26 per share during Q309, compared to a profit of $1.2bn during Q308. But company year-to-date income through Q309 was $6.5bn, compared with $5.8bn during the same period of 2008. BofA paid $1.2bn in preferred dividends for the quarter, including $893m in dividends to the US government”

“Researchers at Barclays Capital (BarCap) expect the October facility date for a government loan program to receive an uptick of requests over the last subscription date. The October 21 Term Asset-Backed Securities Loan Facility (TALF) for commercial mortgage-backed securities (CMBS) will likely see an increase in subscription volume over last month, BarCap said in a research report Friday”

“MGIC Investment Corp. (MTG: 6.42 -12.30%) posted a $517.8m net loss in Q309, compared to losses of $115.4m in Q308 and $184.6m in Q209. The net loss for the first nine months of 2009 was more than $1bn, compared to a net loss of $250m during the same period of 2008.”

“The pain felt in the distressed commercial real estate (CRE) sector will affect the residential mortgage industry on two fronts. The affects range from banks’ disposition of residential assets to a reluctance to lend to the residential sector at all, according to commentary Friday by John Burns Real Estate Consulting. The consulting firm indicated banks may need to dispose of residential assets to concentrate on commercial real estate distress as it continues to pressure the banks. This should have the affect of creating land-buying opportunities at low prices and sparking a bit of recovery, the firm said”

“The Mortgage Investors Coalition called on the Treasury Department to reject a proposal to offer distressed borrowers interest-only payments for a certain length of time as part of the terms of a Making Home Affordable Modification Program (HAMP) workout. The coalition said a proposal being formed by large banks to allow borrowers the option to make interest-only payments as part of a new HAMP workout plan fails to address the issue of negative equity. Such a proposal is not in the best interest of the housing industry and consumers, said the coalition, a recently formed trade group of asset managers holding more than $100bn in residential mortgage-backed securitizations (RMBS) on behalf of pension funds, college endowments and other investors.”

“The legislation passed Thursday requires swap dealers and major swap participants to register with regulators and requires clearing organizations to provide transaction information to appropriate regulators. The bill also provides for public disclosure of aggregate data on swap trading volumes and positions in a way that protects the business transactions and market positions of individuals”

“Revenue from General Electric’s (GE: 16.08 -4.23%) real estate division for the first nine months of 2009 declined 46% compared to 2008, the company said in its Q309 report. GE Capital Real Estate, which creates real estate debt and equity investment funds for institutional investors as well as finances commercial real estate transactions through commercial mortgages in North America, lost $538m in Q309, compared to profit of $244m in Q308. Year-to-date losses through Q309 were $948m.”

“Due to the modifications, overall loan delinquencies dropped as of Sept. 30, 2009, compared to peak levels. Loans 30 to 59 days delinquent fell to $70.6m, 55% lower than the $157.5m on January 31, 2009. Loans 60 or more days delinquent decreased to $16.8m, or 95% lower than the $431.3m on Feb. 28, 2009. Loans in foreclosure fell 38% to $281.8m from $456.2m on June 30, 2009.”